Madeleine Wackernagel : Taking Stock
I hate to be the bearer of bad tidings, especially at this time of year, but spare a thought for the growing numbers of unemployed for whom this is definitely not the season of joy. News from the Central Statistical Service this week was glum: employment in the mining and quarrying, manufacturing, construction and electricity sectors fell by 3,5% between August 1996 and August 1997.
Manufacturing was hardest hit, down from 1,42- million to 1,36-million jobs; followed by mining and quarrying, cut from 561 000 to 546 000; construction, from 321 000 to 314 479; and electricity, down from 40 000 to 39 550.
More proof that a recession of sorts is biting is the monthly change in employment between July and August – 19 743 jobs were cut in these sectors. At the same time, physical volume of production slumped by 1,6% in mining and quarrying; 2,8% in manufacturing; and by 1,8% in electricity.
Given that the biggest blow to the gold price came last month, the next batch of statistics will reflect further job losses. And nobody is prepared.
The National Union of Mineworkers had estimated that between 120 000 and 140 000 jobs would go by June next year with gold trading at a price of $300/oz. Well, those days are long gone. Instead, we’ve hit $281/oz and even the slight uptick in the price this week does not look too convincing.
In the third quarter of this year, 12 mines were marginal – and that was before the latest price slide. Hedging has helped a bit but many of those contracts are now coming up for renewal at a much lower price.
It’s not as if the decline in the industry has come as a complete bolt from the blue: for the past 20 years analysts have been aware of the steadily depleting resources and the rising cost of getting what little is left out of the ground.
All the latest fall in the gold price has done is to accelerate the ongoing restructuring of the industry, which means more jobs will inevitably be lost. But most worrying is the lack of planning for that day.
On some mines there is already a policy of retraining in place – and not only once the inevitable has happened but six months or so beforehand. There is also the Mineworkers Development Agency, which seeks to set up ex- miners in small businesses and helps them to develop other skills.
But much more needs to be done. Gold may be in the doldrums but there are plenty of other minerals that have kept their allure. Granted, the skills needed vary, but that’s where retraining comes in. In the desperate employment situation we face today, all the possibilities have to be exhausted before a worker gets the chop.
And if gold is indeed permanently out of fashion, other industries must be encouraged to fill the gap. While our biggest export industry is slipping inexorably into second place little has been done to encourage diversification or greater foreign investment.
What we need is a coherent, well-planned industrial policy, not the ad hoc decision- making we’re seeing now. The departments of finance and trade must sit down to work out tax breaks and investment incentives to encourage foreign companies to set up shop here, rather than anywhere else. The competition is tough and we’re not doing enough to beat it.
With the world economy set to slow down next year, South Africa’s prospects look even grimmer. And even if the gold price did miraculously rebound, the problems of unemployment would not be solved.
Government alone cannot make things happen; business and labour have to do their bit too. But it’s up to government to lead and the jobs summit would be a good start. Let’s make it a new year’s resolution – and stick to it.